Police are currently investigating Stanbic and Equity banks after a client lost over shs38.9 billion in a gold scam.
Clifford M. Potter, a Canadian businessman and investor sought to buy gold and entered into agreement with a Ugandan national.
The Canadian would later pay money that he deposited to the bank accounts of the Ugandan dealer in Stanbic and Equity but he realized it was a scam.
Potter later ran to the banks to block the withdrawal of the money from the two accounts held by the Ugandan but it was too late, as the Ugandan had already withdrawn all of it.
The businessman later wrote to the two banks but also copied the same to BoU accusing the financial institutions of collusion with the fraudster.
“It has been established that the above named fraudster was able to access the money remitted by our client into his said bank accounts in the bogus gold transaction, only through the dishonest assistance of the bank which facilitated him to instantly draw cash,” the lawyers of Muwema & Co Advocates say.
According to the lawyers, it beats their understanding that the fraudster was able to carry out several transactions without the banks noticing.
“Had it not been for the bank’s ominous and willful breach of the standard prudential banking norms, our client may still have remitted, but most importantly, not lost money to the fraudster. The money transfer transactions would have been reversed upon a due diligence by the bank which would have discovered the fraud early enough.”
The lawyers said the bank knew or had the means of knowing that allowing the said fraudster to receive and instantly withdraw cash without raising any reasonable inquiry or report of a suspicious transaction, made it complicit in the fraud and crime committed.
“As a licensed bank, you abdicated your Quincecare duty of care when you failed to question and flag the obvious financial laundering raised in this case when you openly facilitated it instead and thereby flouted the law. There is no doubt that any prudent banker’s suspicion would have been aroused to cause an investigation of the propriety of the fraudulent transactions which the fraudster weaved and perfected through his regulated bank account.”
“ There is also no doubt that the spot cash withdrawals which the bank granted to the fraudster presented the illegal seal and final act of the gold scam. The bank is very much a part of the acteus reus which firmly places it at the scene of crime.”
The lawyers say having got no response from the two banks in regards the matter and refunding the Canadian businessman, they reported the matter to police which has since kicked off investigations into money laundering.
Having written to the two banks without any response, the lawyers representing the Canadian businessman took the matter a notch higher by reporting it to Police.
Police have since written to the managing directors of the two banks to provide information to aid in the ongoing investigations.
“It is said the bank facilitated the above fraud by failing to comply with the Anti-Money laundering regulations requiring reporting of the suspicious transactions to the Financial Intelligence Authority,” a letter from the acting CID commander for Kampala Metropolitan Area to the respective managing directors written on June, 27 reads in part.
“This is therefore to request you to identify for us the responsible officer who can explain the above allegations and report to KMP headquarters CPS building, room 64 on Thursday, July, 4, 2024.”
